Watch out, Michael Jordan and Hanes.
Another superstar athlete with Chicago connections plans to try to class up men’s undershirts, briefs and boxers.
Three-time NBA champion Dwyane Wade, a Chicago-area native, next year will put his name on the Wade X Naked collection. It’s the first celebrity endorsement deal for underwear maker Naked Brand Group, whose chief distributor is Nordstrom.
Wade also joined the advisory board of the New York-based company, whose investors include Chicagoans. The Miami Heat guard is calling many of the shots in the rollout, having been named “creative director” for his namesake line of skivvies, or, as Naked calls them, “innerwear.”
The Wade collection will include underwear, undershirts, loungewear, sleepwear and robes for men, and is expected to be available next year.
Men’s underwear is a growing multibillion-dollar business, with U.S. sales of men’s bottoms rising 3 percent in the year ending September 2015, to $2.9 billion, according to retail sales tracker NPD Group.
But men’s underwear is a competitive market that also includes such high-end names as Calvin Klein, Polo Ralph Lauren and Hugo Boss. Naked, which also makes women’s goods, estimates that it has more than 100 potential competitors in the market for men’s and women’s intimate apparel, loungewear and sleepwear.
In this underwear matchup, it’s unlikely that Wade will peel off many buyers of the Jordan-endorsed unmentionables.
Wade is going the luxury route while Jordan, featured on Hanes’ website, backs a mass-market supplier.
On Nordstrom.com, shoppers shell out about $40 for a two-pack of Naked “Essential” stretch-cotton boxer briefs.
At Walmart.com, a 5-pack of Hanes boxer briefs can be had for $14.48.
On Tuesday, Naked launches its “Naked Truth” advertising and marketing campaign featuring Wade on digital, social and other media platforms.
Wade learned of Naked through his wife, who brought home a few pairs for him. Wade and his wife, actress Gabrielle Union, have been named by People magazine one of the best-dressed celebrity couples. “He loved the product so much that he got in touch with Naked,” Naked spokeswoman Lauren Weissman said.
Naked and Wade struck the deal last June.
“When I discovered Naked, I immediately loved the brand name as well as the fit and feel of the underwear,” Wade said at the time. “What you wear underneath is the foundation for how you look and feel.”
Naked is “taking innerwear to the next level, and I look forward to helping them build the brand and the business,” said Wade, who has also had partnerships with such companies as the Tie Bar, Gatorade and Pepperidge Farm.
According to a Securities and Exchange Commission filing Friday, Wade and his Wade Enterprises LLC will get royalties of up to 10 percent of net wholesale sales of his products, subject to certain minimum royalty payments.
The deal also includes the grant of a warrant under which Wade can buy up to 365,688 Naked shares. The grant is exercisable for seven years at $4.80 a share.
The shares are trading over-the-counter for about $4.
According to SEC filings, the agreement between Wade and Naked expires in June 2019 but may be extended for up to three years by mutual agreement.
Naked has said the affiliation with Wade will help the company attract additional distributors in North America, Asia and Europe.
Naked products have been made mostly in Canada, China, Turkey and Peru. Most of its products are now made in China, an SEC filing says.
Naked’s SEC filing from last week lays out about three dozen risks in investing in its company, including the perils of aligning itself with a celebrity. The deal isn’t a sure thing for Wade either.
“We have a limited operating history, which makes it difficult to evaluate our company or future operations,” Naked said in an SEC filing.
Naked’s major investors include two Chicago-based groups, Bard Associates and Lincoln Park Capital, according to an SEC filing.
Bard invests in U.S. microcap stocks, meaning that the total value of a company’s stock is typically less than $300 million. Bard has about $300 million invested in U.S. stocks for its clients.
“We like the product,” Bard analyst Elinor Escamilla said Monday.
She also likes the new management Naked brought on board in 2014 and is excited to see what happens with the Wade line, she said.
“It’s a really good endorsement to have,” Escamilla said.